In Jainism, Deepawali has an added significance to the great event of Lord Mahavira attaining the eternal bliss of nirvana.
Diwali also commemorates the return of Lord Rama along with Sita and Lakshman from his fourteen year long exile and vanquishing the demon-king Ravana.
In joyous celebration of the return of their king, the people of Ayodhya, the Capital of Rama, illuminated the kingdom with earthen diyas (oil lamps) and burst crackers.